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Impact of fragmented emission reduction regimes on the energy market and on CO2 emissions related to land use: A case study with China and the European Union as first movers

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  • Otto, Sander A.C.
  • Gernaat, David E.H.J.
  • Isaac, Morna
  • Lucas, Paul L.
  • van Sluisveld, Mariësse A.E.
  • van den Berg, Maarten
  • van Vliet, Jasper
  • van Vuuren, Detlef P.

Abstract

In recent years, an approach based on voluntary pledges by individual regions has attracted interest of policy-makers and consequently also climate policy research. In this paper, we analyze scenarios in which the EU and China act as early-movers in international climate policy. Such a situation risks leakage between regions with ambitious emission reduction targets and those with less ambitious targets via fossil-fuel markets, displacement of heavy industry and land-use consequences. We examine some of these factors using the IMAGE model. While IMAGE does not include all mechanisms, we find the leakage rate to be relatively small, about 5% of the emission reductions in the EU and China. The far majority occurs via the energy market channel and the remainder through land-use change. Reduced oil prices due to less depletion forms the key reason for this leakage impact.

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  • Otto, Sander A.C. & Gernaat, David E.H.J. & Isaac, Morna & Lucas, Paul L. & van Sluisveld, Mariësse A.E. & van den Berg, Maarten & van Vliet, Jasper & van Vuuren, Detlef P., 2015. "Impact of fragmented emission reduction regimes on the energy market and on CO2 emissions related to land use: A case study with China and the European Union as first movers," Technological Forecasting and Social Change, Elsevier, vol. 90(PA), pages 220-229.
    • Handle: RePEc:eee:tefoso:v:90:y:2015:i:pa:p:220-229
    DOI: 10.1016/j.techfore.2014.01.015
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    4. Chen, Xianwen & Alfnes , Frode & Rickertsen , Kyrre, 2015. "Labeling Farmed Seafood," Working Paper Series 10-2015, Norwegian University of Life Sciences, School of Economics and Business.
    5. Wei-Hua Qu & Ling Xu & Guo-Hua Qu & Zhi-Jun Yan & Jian-Xiu Wang, 2017. "The impact of energy consumption on environment and public health in China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 87(2), pages 675-697, June.
    6. Chang, Kai & Chen, Rongda & Chevallier, Julien, 2018. "Market fragmentation, liquidity measures and improvement perspectives from China's emissions trading scheme pilots," Energy Economics, Elsevier, vol. 75(C), pages 249-260.
    7. Capellán-Pérez, Iñigo & de Castro, Carlos & Arto, Iñaki, 2017. "Assessing vulnerabilities and limits in the transition to renewable energies: Land requirements under 100% solar energy scenarios," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 760-782.
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